Stratford firm into hot water for oil rigs

Published 8:43 pm, Friday, March 8, 2013

Artists rendering of the habitation module, on the $78 million PEMEX deep sea oil rig. Hubbell Heaters is providing the hot water system for the module where oil rig workers will live.

Artists rendering of the habitation module, on the $78 million PEMEX deep sea oil rig. Hubbell Heaters is providing the hot water system for the module where oil rig workers will live.

Photo: Contributed Photo

Stratford firm into hot water for oil rigs

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The need for deep sea oil rigs is generating revenue and jobs in Stratford.

"We are running out of space," said Chris Ortiz, sales manager and engineer for Hubbell Heaters at 45 Seymour St., in Stratford. The factory, which makes water heaters for industrial, commercial and marine uses, has room to expand if the demand keeps up.

This week, Hubbell announced a $1 million contract to provide the water-heating system for an offshore oil rig being built for Mexico's state-run oil company, PEMEX.

Stratford town officials need not worry that demand will force a relocation, as Ortiz said the company has room to expand at its site.

But there is an increase in work and more to win in this market, he said Friday.

"We've been quoting and supplying more and more every year," Ortiz said.

New rigs are needed to meet rising global demands sparked in part by industrial expansion in China and India. As a result, oil companies are hunting for new fields and venturing deeper into the ocean. They are also developing new technologies to reach sources where extraction, like from tar sands, has been difficult.

Meanwhile, nearly 50 percent of the world's oil rig fleet is more than 25 years old, according to a Wall Street Journal report from August.

When the process to build those rigs started in 1987, the price of oil was about $20 a barrel on the New York Mercantile Exchange and when they started to enter service, prices were still around $20. Oil remained around that mark until 1999, according to U.S. Energy Information Agency statistics. Since 1999, however, the price of oil has increased from $23.45 to today's levels of almost $92.

For Hubbell and other Connecticut companies, the demand for new sources is driving business.

Ortiz said his company has built about eight water heating systems for rigs in the last 15 years and it has hundreds of them on other platforms. Employment has expanded during that time, with 10 people added in the welding department in the last three years and total employment is now at 100, following a recent acquisition.

Norwalk-based Bolt Technologies, a seismic exploration equipment maker, said sales for the six months ended Dec. 31, 2012, topped $28.6 million, an increase of 19 percent from the same period in 2011.

In its quarterly report, filed with the U.S. Securities and Exchange Commission, Bolt said higher sales were "primarily due to increased marine seismic exploration activity and the lifting of the moratoriums on exploration in the Gulf of Mexico. All major product categories in the three marine seismic data acquisition segments reported higher sales."

In Danbury, Praxair, besides providing gasses used in welding and the construction of platforms, has also won contracts related to oil production in recent years.

In 2010, Praxair signed a deal with the Abu Dhabi Company for Onshore Oil Operations for an oil recovery project in which Praxair provided carbon dioxide injection for test wells. Praxair is also nearing the end of a 15 year oil recovery project with PEMEX.

After building the system here, Hubbell will ship it to the gulf and four or five engineers, mechanics and pipe fitters will install it on the platform. Workers from Stratford will remain on site to train crews for two weeks and then will live on the platform for about a week.

Ortiz has participated in these kinds of installations, and said it's an incredible experience.

The living quarters on the platforms are like big hotels, housing 150 to 250 people, and Hubbell's system is vital to these workers.

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As far as being on the rigs, he said, "The food is OK. There's a nice workout room. But the views are the best -- being out in the Gulf of Mexico and not seeing any land. You're in deep water."